PUBLICATION

San Francisco Q4 Market Report

02 JANUARY 2020

SAN FRANCISCO SHOWS EARLY SIGNS OF MARKET STABILIZATION AS PACE OF LEASING ACTIVITY COOLS

Quarterly leasing activity in San Francisco dropped to 1.7 million square feet (msf), marking the lowest amount of quarterly leasing activity in the city since Q2 2017. The persistent constraints on office supply that San Francisco has been experiencing for some time appear to be a predominant cause for the lull in leasing. As a result, the overall availability rate rose 240 basis points to 9.6%. Similarly, Class A availability rose 210 basis points to 8.1%, the highest seen since mid-2018. Overall asking rents remained relatively constant at $81.18 per square foot (psf), while Class A asking rents dropped 2.1% quarter over quarter to $87.36 psf. The market appears to be stabilizing somewhat; however, tenants still face tight competition for prime space and some of the highest rents in the country.

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